An Australian wheat exporter has admitted paying money to Saddam Hussein's former regime in Iraq in violation of United Nations sanctions. An inquiry into claims that the former Australian Wheat Board paid bribes for contracts released a statement in which the board apologised for its actions.

The board said it was "truly sorry" and regretted any damage it had caused.

Australian Prime Minister John Howard has been among officials questioned by the inquiry, which will report in June.

'Warning signs'

The draft statement was submitted to the inquiry in March but only made public on Thursday.

In it, the wheat board's former managing director Andrew Lindberg, acknowledges that money was paid to the former Iraqi regime in contravention of UN sanctions.

"Even though there were warning signs to some employees that this may have been occurring, AWB [former Australian Wheat Board] did not challenge these payments and was not alert to the potential consequences of making these payments," the statement said.

"For this we are truly sorry and deeply regret any damage this may have caused to Australia's trading reputation, the Australian government or the United Nations."

A UN report in 2005 said the board paid about $220m to Saddam Hussein's regime to secure $2.3bn in wheat contracts under the UN's oil-for-food programme.

The report said the bribes were channelled into Iraq in bogus transport fees to a Jordanian company, which was partially owned by the Iraqi government.

Repercussions

The scandal has had political repercussions, reaching the highest levels of the Australian government.

Prime Minister Howard and his foreign and trade ministers have testified before the inquiry, denying having seen more than 20 diplomatic cables warning that AWB might be paying kickbacks.

Mr Howard has told investigators: "There was absolutely no belief, anywhere in the government, at that time that AWB was anything other than a company of high reputation."

The inquiry, led by retired judge Terence Cole, can recommend the prosecution of individuals who violated Australian law, but not politicians.

The new Iraqi government has suspended trading with the AWB until the outcome of the inquiry is known.